Bill moves PTO closer to corporate status

The Commerce Department's Patent and Trademark Office is one step closer to becoming a government corporation.

Last week the House Judiciary Committee reported out of committee H.R. 3460, a bill sponsored by Rep. Carlos Moorhead (R-Calif.) that would make PTO a government corporation but keep it under the general policy oversight of the secretary of Commerce.

The bill would also free PTO from paying any Commerce overhead costs, although it does not address the issue of who gets control of user fees.

About 20 percent of the user fees the agency takes in every year currently go to Congress and must be appropriated back. PTO has asked for control of this money.

As a government corporation under H.R. 3460, PTO would be headed by a commissioner of patents and trademarks, who would be appointed by the president. The commissioner must consult with a newly established 12-member Management Advisory Board on a regular basis on budget, operation and user-fees issues.

The bill would keep a Trademark Trial and Appeal Board as well as a PTO Board of Patent Appeals and Interferences to review and rule on specific patent application issues, but it would change how the boards' members are appointed.

While PTO wants to become a government corporation, and the bill has bipartisan support, "it is highly controversial," said a staff member on the House Judiciary Committee. For example, Rep. Dana Rohrabacher (R-Calif.) has a competing proposal and is against Moorhead's bill.

And while Moorhead's bill represents an amalgamation of various bills introduced over the past year - including Moorhead's original bill, H.R. 1659, which was later folded into H.R. 1756, the Commerce Dismantling Act - it does not address the administration's proposal from earlier this year that would make PTO a performance-based organization (PBO).

As a PBO, it could operate more like a commercial business and have more flexibility in procurement and control over finances and personnel.

"It's a little bit of everything but not everything the administration would wish," a PTO source said.